Court Enters Order to Show Cause for Conversion of Case or Appointment of Trustee; Committee Granted Authority to Pursue Turnover Actions

On or about January 22, 2014, the Court entered an Order denying the approval of the Debtor’s 3rd Amended Plan and Disclosure Statement.  After an informal status conference conducted by the Court, the parties agreed that the Disclosure Statement could not be approved nor the Plan confirmed in light of the non-existence of a viable private sale of substantially all of the Debtor’s assets.  In conjunction therewith, the Court then issued an Order to Show Cause why the Chapter 11 Bankruptcy Case should not be converted to Chapter 7 or why a Chapter 11 trustee should not be appointed.  The Court cited the parties’ failure to bring the status of the case into issue as its reasoning for acting on its own under the circumstances.  A hearing is currently scheduled for February 24, 2014, at 10:00a.m. in the Erie Bankruptcy Courtroom.

Additionally, the Court entered an Order granting the Official Committee of Unsecured Creditors authority to pursue claims against Oz Gas Aviation, LLC and Richard M. Osborne based on certain insider advances that have not been repaid to the Debtor or that have otherwise been re-characterized as uncollectible.